This summary is based on the first quarter fiscal 2007 earnings call conducted by XL Capital Inc. (XL: chart) on April 25, 2007.

President and Chief Executive Officer: Brian O’Hara
Chief of Staff and Interim Chief Financial Officer: Fiona Luck
Chief Operating Officer: Henry Keeling
Director of Investor Relations: David R. Radulski

Key Investors Issues

- The net income was $3.06 per share as against $2.56 a share in the prior year.
- Return on ordinary shareholders'' equity was 22.4% for the quarter.

First Quarter Fiscal 2007 Financial Highlights

The net income was $549.7 million or $3.06 per ordinary share, compared with net income of $458.5 million, or $2.56 per share in prior year.

Net income for the quarter included pre-tax, net losses from Windstorm Kyrill of $55 million, which is lower than the company''s previously announced estimated range of between $60 million and $75 million. After taking into account net reinstatement premiums and tax effects, the net income impact of this event was $42 million. Net income excluding net realized gains and losses was $543.4 million, or $3.03 per ordinary share, compared with net income excluding net realized gains and losses of $405.5 million, or $2.26 per ordinary share, for the prior year period.

The highlights of the quarter include strong insurance underwriting profit of $107 million, with a combined ratio of 89.1%.

This includes a $10 million loss for Windstorm Kyrill and solid underwriting results in reinsurance with a combined ratio of 93%. This is despite $45 million of Kyrill losses and other first quarter natural catastrophe losses of 20 million. The current estimated Kyrill losses of $55 million are slightly below the originally estimated range of $60 million to $75 million.

The general operations net investment income increased 20% to $313 million compared to the same period last year.

The total net income from investment-related affiliates was $156 million compared to $97 million in the year-ago quarter.

The firm has favorable prior year development in general operations this quarter, amounting to $74 million.

Reinsurance accounted for the majority of the release with $54 million, and of this $47 million related to the property and other short-term lines of business. The contributions from life operations of $23 million and financial lines of $57 million were both up significantly year over year.

SCA’s net income rose by over 64% over the same period last year to $37 million.

After taking into account minority interests, XL’s share of these earnings was $23 million. The firm has noted in its financial supplements that certain European life accident and health business previously managed under reinsurance operations has now been realigned under its life operations.

Net investment income from general operations for the quarter grew by 20% over the same quarter last year.

This increase was largely due to higher investment yields, with average yields 70 basis points higher than a year ago.

During the first quarter, XL Capital lengthened the average duration of its overall portfolio from 3.9 years to 4.2 years.

This was largely driven by repositioning the U.S. dollar portion of the general operations portfolio to more neutral point relative to the duration of property casualty liabilities.